TRENTON, N.J., Dec. 3, 2004 (PRIMEZONE) -- Emtec Inc. (OTCBB:ETEC), a systems integrator providing technology solutions to enable customers to effectively use and manage data to grow their businesses, today announced its results for the second quarter ended September 30, 2004.
Net income for the three months ended September 30, 2004 rose by 543.6 percent to $616,393, or $0.08 per share, compared to a net loss of $138,948, or $0.02 per share, for the comparable period in 2003.
Net income for the six months ended September 30, 2004, rose to $1.22 million, or $0.16 per share compared to a net income of $218,943, or $0.03 per share, for the same period in 2003 -- an increase of 457.0 percent.
Management attributed both of these increases in net income to computer roll-out projects for various school districts in Ga. and Fla., and revenue growth in the company's commercial customer base as well as continuous cost containment efforts undertaken by the company, which include consolidation of its operations, administrative and inventory warehousing functions from Mt. Laurel, N.J. and Cranford, N.J. to Trenton, N.J. during the first quarter, as well as outsourcing of its Network Operation Center (NOC) and Help Desk to a third party during the second quarter. By outsourcing this part of its business, the company is able to continue to offer these strategic services while allowing it to change the high fixed cost structure of the business to a variable cost structure. The company's average costs for NOC and Help Desk have decreased from approximately $70,000 a month to approximately $28,000 a month starting September 2004.
John Howlett, CEO of Emtec Inc., said, "We are pleased to deliver another quarter of improving financial results and fourth consecutive quarter of profitability for our company."
About Emtec Inc.
Emtec Inc., established in 1981, is a systems integrator focused on providing technology solutions that enable its customers to effectively use and manage their data to grow their businesses. The company's areas of specialization in information technology (IT) services include enterprise computing, data communications, data access, network design, enterprise backup and storage consolidation, managed services and staff augmentation. Emtec's solutions are crafted to enable its customers to become more efficient and effective, thereby giving them a competitive advantage.
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended September 30,
2004 2003 Change %
Revenues
Procurement services $25,386,725 $ 21,907,100 $ 3,479,625 15.9%
Service and consulting 3,697,004 3,862,066 $ (165,062) -4.3%
Geothermal 49,407 45,388 $ 4,019 8.9%
Total Revenues 29,133,136 25,814,554 $ 3,318,582 12.9%
Cost of Revenues
Procurement services 22,732,765 19,749,338 $ 2,983,427 15.1%
Service and consulting 2,481,041 2,754,636 $ (273,595) -9.9%
Geothermal 16,291 12,598 $ 3,693 29.3%
Total Cost of Revenues 25,230,097 22,516,572 $ 2,713,525 12.1%
Percent of revenues 86.60% 87.22%
Gross Profit
Procurement services 2,653,960 2,157,762 $ 496,198 23.0%
Service and consulting 1,215,963 1,107,430 $ 108,533 9.8%
Geothermal 33,116 32,790 $ 326 1.0%
Total Gross Profit 3,903,039 3,297,982 $ 605,057 18.3%
Percent of revenue 32.9% 28.7%
Operating Expenses
Sales, General
& Administrative
Expenses 2,857,919 3,379,569 $ (521,650) -15.4%
Interest Expense 58,727 73,386 $ (14,659) -20.0%
Total Operating
Expenses 2,916,646 3,452,955 $ (536,309) -15.5%
Percent of revenue 10.01% 13.38%
Income (Loss) Before
Income Tax 986,393 (154,973) $ 1,141,36 736.5%
Income Tax
Expense (Benefit) 370,000 (16,025) $ 386,025 2408.9%
Net Income (Loss) $ 616,393 $ (138,948) $ 755,341 543.6%
Income (Loss) Per Share
(Basic And Diluted) $ 0.08 $ (0.02)
EMTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended September 30,
2004 2003 Change %
Revenues
Procurement
services $ 50,147,191 $ 45,637,829 $ 4,509,362 9.9%
Service and
consulting 7,500,745 8,564,092 $(1,063,347) -12.4%
Geothermal 92,035 92,973 $ (938) -1.0%
Total Revenues 57,739,971 54,294,894 $ 3,445,077 6.3%
Cost of Revenues
Procurement
services 44,701,032 41,440,831 $ 3,260,201 7.9%
Service and
consulting 5,134,511 5,822,416 $ (687,905) -11.8%
Geothermal 34,076 30,082 $ 3,994 13.3%
Total Cost of
Revenues 49,869,619 47,293,329 $ 2,576,290 5.4%
Percent of
revenues 86.37% 87.10%
Gross Profit
Procurement services 5,446,159 4,196,998 $ 1,249,161 29.8%
Service and
consulting 2,366,234 2,741,676 $ (375,442) -13.7%
Geothermal 57,959 62,891 $ (4,932) -7.8%
Total Gross Profit 7,870,352 7,001,565 $ 868,787 12.4%
Percent of revenue 13.63% 12.90%
Operating Expenses
Sales, General &
Administrative
Expenses 5,838,263 6,584,814 $ (746,551) -11.3%
Interest Expense 97,557 172,552 $ (74,995) -43.5%
Total Operating
Expenses 5,935,820 6,757,366 $ (821,546) -12.2%
Percent of revenue 10.28% 12.45%
Income (Loss) Before
Income Tax 1,934,532 244,199 $ 1,690,333 692.2%
Income Tax Expense
(Benefit) 715,000 25,256 $ 689,744 2731.0%
Net Income (Loss) $ 1,219,532 $ 218,943 $ 1,000,589 457.0%
Income (Loss) Per
Share Basic $ 0.17 $ 0.03
Income (Loss) Per
Share Diluted $ 0.16 $ 0.03
Forward-Looking Statements
Certain statements in this document constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Emtec Inc., or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The company's future operating results are dependent upon many factors, including but not limited to the company's ability to obtain sufficient capital or a strategic business arrangement to fund its plan of operations when needed and build the management and human resources and infrastructure necessary to support the growth of its business as well as competitive factors and developments beyond the company's control, and other risk factors discussed in the company's periodic filings with the Securities and Exchange Commission which are available for review at www.sec.gov under "Search for Company Filings."
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